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Transferring cognitive talent across domains to reduce the disposition effect in investment
We consider Theory of Mind (ToM), the ability to correctly predict the intentions of others. To an important degree, good ToM function requires abstraction from one’s own particular circumstances. Here, we posit that such abstraction can be transferred successfully to other, non-social contexts. We...
Autores principales: | , , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Nature Publishing Group UK
2021
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8630220/ https://www.ncbi.nlm.nih.gov/pubmed/34845327 http://dx.doi.org/10.1038/s41598-021-02596-2 |
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author | Rotaru, Kristian Kalev, Petko S. Yadav, Nitin Bossaerts, Peter |
author_facet | Rotaru, Kristian Kalev, Petko S. Yadav, Nitin Bossaerts, Peter |
author_sort | Rotaru, Kristian |
collection | PubMed |
description | We consider Theory of Mind (ToM), the ability to correctly predict the intentions of others. To an important degree, good ToM function requires abstraction from one’s own particular circumstances. Here, we posit that such abstraction can be transferred successfully to other, non-social contexts. We consider the disposition effect, which is a pervasive cognitive bias whereby investors, including professionals, improperly take their personal trading history into account when deciding on investments. We design an intervention policy whereby we attempt to transfer good ToM function, subconsciously, to personal investment decisions. In a within-subject repeated-intervention laboratory experiment, we record how the disposition effect is reduced by a very significant 85%, but only for those with high scores on the social-cognitive dimension of ToM function. No such transfer is observed in subjects who score well only on the social-perceptual dimension of ToM function. Our findings open up a promising way to exploit cognitive talent in one domain in order to alleviate cognitive deficiencies elsewhere. |
format | Online Article Text |
id | pubmed-8630220 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2021 |
publisher | Nature Publishing Group UK |
record_format | MEDLINE/PubMed |
spelling | pubmed-86302202021-12-01 Transferring cognitive talent across domains to reduce the disposition effect in investment Rotaru, Kristian Kalev, Petko S. Yadav, Nitin Bossaerts, Peter Sci Rep Article We consider Theory of Mind (ToM), the ability to correctly predict the intentions of others. To an important degree, good ToM function requires abstraction from one’s own particular circumstances. Here, we posit that such abstraction can be transferred successfully to other, non-social contexts. We consider the disposition effect, which is a pervasive cognitive bias whereby investors, including professionals, improperly take their personal trading history into account when deciding on investments. We design an intervention policy whereby we attempt to transfer good ToM function, subconsciously, to personal investment decisions. In a within-subject repeated-intervention laboratory experiment, we record how the disposition effect is reduced by a very significant 85%, but only for those with high scores on the social-cognitive dimension of ToM function. No such transfer is observed in subjects who score well only on the social-perceptual dimension of ToM function. Our findings open up a promising way to exploit cognitive talent in one domain in order to alleviate cognitive deficiencies elsewhere. Nature Publishing Group UK 2021-11-29 /pmc/articles/PMC8630220/ /pubmed/34845327 http://dx.doi.org/10.1038/s41598-021-02596-2 Text en © The Author(s) 2021 https://creativecommons.org/licenses/by/4.0/Open AccessThis article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/ (https://creativecommons.org/licenses/by/4.0/) . |
spellingShingle | Article Rotaru, Kristian Kalev, Petko S. Yadav, Nitin Bossaerts, Peter Transferring cognitive talent across domains to reduce the disposition effect in investment |
title | Transferring cognitive talent across domains to reduce the disposition effect in investment |
title_full | Transferring cognitive talent across domains to reduce the disposition effect in investment |
title_fullStr | Transferring cognitive talent across domains to reduce the disposition effect in investment |
title_full_unstemmed | Transferring cognitive talent across domains to reduce the disposition effect in investment |
title_short | Transferring cognitive talent across domains to reduce the disposition effect in investment |
title_sort | transferring cognitive talent across domains to reduce the disposition effect in investment |
topic | Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8630220/ https://www.ncbi.nlm.nih.gov/pubmed/34845327 http://dx.doi.org/10.1038/s41598-021-02596-2 |
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